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Osborne in loans gamble

The British chancellor George Osborne will unveil plans to pump £40 billion (€48 billion) of cheap loans into small businesses in this week’s budget, in a desperate bid to boost the UK economy.

He is also considering a cut in the top rate of income tax from 50p to 45p following stinging criticisms from some of Britain’s leading entrepreneurs.

To appease his Liberal Democrat coalition partners, he will launch a crackdown on tax avoidance by rich individuals, which is expected to raise up to £1 billion a year.

However, the key to what he will present as a “pro-growth” budget will be the credit-easing scheme he flagged up in last year’s autumn statement. Companies with turnover of up to £50m will be given access to cut-price loans through a deal arranged with the big banks.

The British chancellor will initially make £20 billion available, but this could double over time